Eight groups vie for Napocor advisor role

Eight foreign and local groups are vying for the right to act as the financial advisor of government on the privatization of National Power Corp. (Napocor).

Finance Secretary Jose Isidro Camacho, who is concurrent chairman of the state-run power firm, said the financial advisor will help draft a privatization plan for the generating companies and a transmission company that will be created when Napocor breaks up its assets.

Camacho said initial proposals were received from BPI Capital Corp., N.M. Rothschild, Citigroup with Salomon Smith Barney, Credit Suisse First Boston, ING Barings and Price Waterhouse Coopers, JP Morgan Chase, Lehman Brothers and Australian investment bank MacQuarrie Bank Group.

Camacho said the advisor will help government come up with a draft privatization plan in the next two months while a final plan will be drawn up before the end of the year.

The government is expected to come up with its shortlist later this month and presentation of those which qualify will follow.

The privatization of Napocor is seen to be completed in one-and-a-half years after the power industry restructuring law was passed by Congress.

Napocor is currently in the process of drawing up the implementing rules and regulations of the privatization law and shortly after is expected to conduct an international roadshow to drum up interest among foreign investors.

The amount to be generated from the sale is crucial since this will determine how much the National Government has to shoulder and eventually pass on to end-users through a so-called universal levy.

So far, government has put a cap of P200 billion from the total stranded cost it will

absorb from the power firm. At this cap, the universal charge will amount to about 25 to 30 centavos spread over a period of 15 to 20 years.

The government expects to raise up to $4.5 billion from the privatization of Napocor’s assets. – Rocel Felix